Acceptance Mirror Image Rule & the Battle of the Forms 1. Mirror Image Rule The rule requires that an offeree respond to an offer with an acceptance that is definite and unconditional, and that matches the terms of the offer exactly and unequivocally. Most common-law and civil-law countries follow the mirror image rule. Under these laws, it is unlikely for an acceptance containing different or additional terms to become effective. Such acceptance is usually considered a counteroffer and thus a rejection of the original offer. 2. The Battle of the Forms As the mirror image rule requires that an acceptance be unconditional, both parties, buyer and seller, have to negotiate back and forth through standard business forms. The mirror image rule is the source of the battle of the forms. offer The counteroffer counteroffer … “last shot” principle: The form sent last in time will prevail others as the contract. 3. Modification to Mirror Image Rule Modification under UCC Modification under the CISG----Art. 19 Modification under China’s contract law---Art.30, 31 Modification under UCC A. In the United States the mirror image rule has been changed by statute (the UCC) to deal with modern business practices.-- UCC 2-207 (1) A written confirmation with additional or different terms operates as an acceptance unless… (It breaks the mirror image rule.) (2) Between merchants, an acceptance by a A. B. C. confirmation that contains new terms will produce a contract and new terms become a part of contract unless: The buyer (the offeror) expressly limits … The new terms materially alter… The buyer notifies the seller of an objection to the new terms B. How to deal with the additional or different terms A. To become a part of the contract The contract is concluded between merchants, containing those additional or different terms which only reflects minor differences (related to usual and customary usage in trade). B. Not to become a part of the contract The contract would arise without the new terms if the new terms reflect major differences ( material alteration---- that is not commonly accepted in the trade and that would result in surprise hardship). Modification under the CISG----Art. 19 1. The CISG compromises between the mirror image rule set out by the common and civil law and the UCC. Under the CISG: (1) the acceptance containing the new terms that do not materially alter the terms of the offer becomes a part of the contract.---- close to the UCC (2) The purported acceptance containing the new terms that do materially alter the terms of the offer would constitute a rejection of the offer and a counteroffer.---- close to the mirror image rule 1. The CISG compromises between the mirror image rule set out by the common and civil law and the UCC. Under the CISG: (1) the acceptance containing the new terms that do not materially alter the terms of the offer becomes a part of the contract.---- close to the UCC (2) The purported acceptance containing the new terms that do materially alter the terms of the offer would constitute a rejection of the offer and a counteroffer.---- close to the mirror image rule 2. Unlike the UCC, the CISG goes further to define “material alteration” : The key elements that will materially alter a contract: price, payment, quality and quantity of the goods, place and time of delivery, extent of one party’s liability to the other or the settlement of disputes China’s contract law---- Art.30, 31 第三十条 承诺的内容应当与要约的内容一致。 受要约人对要约的内容作出实质性变更的, 为新要约。 有关合同标的,数量,质量,价 款或者报酬,履行期限,履行地点和方式,违 约责任和解决争议方法等的变更, 是对要约 内容的实质性变更。 第三十一条 承诺对要约内容作出非实质性变更 的,除要约人及时表示反对或要约 表明承诺 不得对要约的内容作出任何变更的以外,该承 诺有效,合同的内容以承诺的内容为准。 China’s contract law---- Art.30, 31 Article 30 The contents of an acceptance shall comply with those of the offer. If the offeree substantially modifies the contents of the offer, it shall constitutes a new offer. The modification relating to the contract object, quality, quatity, price or renumeration, time or place or method of performance, liabilities for breach of contract and the settlement of disputes, etc., shall constitute the substantial modification of an offer. Article 31 If the acceptance does not substantially modifies the contents of the offer, it shall be effective, and the contents of the contract shall be subject to those of the acceptance, except as rejected promptly by the offeror or indicated in the offer that an acceptance may not modify the offer at all. Conclusion Mirror image rule is adopted by most countries of the world. In order to pursue the flexibility of contracting, the UCC, the CISG and China’s contract law modify this rule to some extent. The CISG is close to the UCC somewhat, but it has more specific provisions. China’s contract law is similar to the CISG.